Friday, January 19–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mostly firmer overnight. U.S. stock indexes are pointed toward higher openings when the New York day session begins.
There are growing worries in the marketplace the U.S. government will shut down starting this weekend, as U.S. lawmakers cannot agree on a budget and President Trump seems willing to close up the government to make a point. The concerns have not had a major impact on the world marketplace, but have somewhat limited buying interest in U.S. equities late this week, have pressured the U.S. dollar in the foreign exchange market, and have also given a slight lift to the safe-haven gold market.
The key outside markets on Friday morning see the U.S. dollar index weaker. Meantime, Nymex crude oil prices are also modestly lower. The International Energy Agency said Friday that U.S. crude oil production will climb above 10 million barrels a day in 2018—the highest level since 1970. U.S. crude production this year will surpass that of Saudi Arabia and rival that of Russia, said the IEA. This has worked to dent bullish notions in the oil market.
U.S. economic data due for release Friday is light and includes the University of Michigan consumer sentiment survey.
–Jim
U.S. STOCK INDEXES
March S&P 500 December e-mini futures: Prices are
higher in early U.S. trading and near this week’s contract and record high. Bulls have the solid overall near-term technical advantage. However, the market is still short-term overbought and due for a decent downside correction. The shorter-term moving averages (4-, 9- and 18-day) are bullish early today. The 4-day moving average is above the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Today, shorter-term technical resistance comes in at the contract and record high of 2,809.50 and then at 2,825.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 2,791.75 and then at this week’s low of 2,769.25. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 6.0
March Nasdaq index December futures: Prices are higher in early U.S. trading and hit a contract and record high overnight. The bulls have the solid overall near-term technical advantage. However, the market is still short-term overbought and due for a decent downside correction soon. Shorter-term moving averages (4- 9-and 18-day) are bullish early today. The 4-day moving average is above the 9-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at the contract high of 6,852.25 and then at 6,875.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 6,801.50 and then at 6,750.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 6.5.
U.S. TREASURY BONDS AND NOTES
March U.S. T-Bonds: Prices are lower and hit a contract low in early U.S. trading. Bears have the solid overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at the overnight high of 149 8/32 and then at 150 even. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight contract low of 148 24/32 and then at 148 16/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 3.0
March U.S. T-Notes: Prices are lower and hit another contract low in early U.S. trading. Bears have the solid overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at Thursday’s high of 122.19.0 and then at 122.25.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight contract low of 122.09.0 and then at 122.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 3.0
U.S. DOLLAR INDEX
The March U.S. dollar index is weaker in early U.S. trading. Bears have the solid overall near-term technical advantage. The shorter-term moving averages for the dollar index are bearish as the 4-day is below the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at the overnight high of 90.360 and then at this week’s high of 90.765. Shorter-term support is seen at this week’s low of 89.960 and then at 89.750. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
February Nymex crude oil prices are weaker in early U.S. trading, on profit taking after prices hit a three-year high on Tuesday. Bulls still have the solid overall near-term technical advantage. Look for buy stops to reside just above technical resistance at $64.35 and then at this week’s high of $64.89. Look for sell stops just below technical support at $63.00 and then at $62.50. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
Grain futures were firmer overnight, on short covering. Bulls have had the better week. Recent gains in soybeans hint that a market bottom is in place. Corn and wheat futures continue to languish not far above their recent lows, but more gains in those two markets early next week would begin to suggest market bottoms are in place.